How to Write a Tenant Rejection Letter

One of the most important jobs of a property manager or a landlord is to screen tenants into the rental property that are very likely to be reliable. Although some tenants can fool even the best screeners, there are plenty of times when a background check or a credit check will pull up questionable data that will trigger a tenant rejection. How you approach the tenant rejection letter will either enhance the reputation you have in your community... or ruin it.

You Must Follow An Exact Course of Action

Tenants have a number of laws that protect them, from anti-discrimination laws to fair credit laws. The course of action that must be taken in the tenant rejection letter must be based on the source of information that has caused the rejection. Internal records, credit reports, or third parties can all provide this type of information.

If you are basing the rejection off of information that was found in a credit report, then the tenant rejection letter must include the name, the address, and other contact information of the credit reporting agency that supplied the report. It is also important to mention that the credit reporting agency did not influence the decision, but that it was based on the information supplied in the report. You'll also want to advise the rejected tenant that they can dispute the accuracy of the information that caused the rejection.

For information that comes from a third party, such as a reference, that has caused a rejection to occur, the process is similar. Instead of stating that you received the information from a credit report, you state that you received the information from a third party. Having a form letter with the various reasons for denial all listed will allow you to simply circle the reason why the tenant failed to meet your application criteria.

Attach Any Supporting Documentation That You Receive

If you have third party information or background information that causes the rejection, try to include copies of the specific documents that led to the rejection. This allows the tenant to pursue fixing inaccurate information and shows that you didn't base your decision off of any form of discrimination. This could include documentation of a previous eviction, a felony conviction that prevents living within a certain area that includes your rental property, or a copy of the credit report itself.

Although it is never easy to reject a tenant, sticking to your criteria and not allowing any exceptions will allow you to create the most profitable experience possible from your rental properties. As long as your rejections are legally valid and truthful, you'll ultimately be providing your tenant with information they may need for future applications.

Make sure you keep a copy of your rejection letters for at least 3 years in case any claims are brought against you in the future. This will give you the defense you need to prove you rejected a tenant legally.

Posted on Aug 04, 2014

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